wHAT TO DO IF YOU ARE APPOINTED AS AGENT UNDER |
| Now, this may seem obvious, but the first thing you should do once nominated as a principal's agent, is read the Power of Attorney (POA) document. Legally, you must act according to the standards of the Michigan prudent investor rule as defined by MCL 700.1501 -1512. In other words, you must "exercise reasonable care, skill, and caution" as a prudent investor would. So it is important to have a thorough understanding of the principal's wishes, as depicted in the Power of Attorney document. |  |
2. STORE IN A SAFE PLACE
Make sure to keep a copy in a safe yet easily accessible place so it is readily available. This is a document that you may use frequently, so it is important to keep it on hand.
Make sure to keep a copy in a safe yet easily accessible place so it is readily available. This is a document that you may use frequently, so it is important to keep it on hand.
3. UPDATE FINANCIAL INSTITUTIONS
 | It is important to update the principle's bank and investment accounts as soon as possible to reflect your new role. Contact the bank and ask a representative what they require to add you to the principle's account. This is not the same as joint ownership. Keep in mind that you must keep all money belonging to the principle separate from your own funds. |
4. KEEP DETAILED ACCOUNTING RECORDS
Make sure to include both physical checks as well as electronic payments and debit card transactions. Carefully review each bank statement and reconcile it to a check register. Maintain a file with copies of all financial statements, bills, invoices, and receipts. You may even consider using an accounting software program to assist with maintaining accurate accounting records.
Make sure to include both physical checks as well as electronic payments and debit card transactions. Carefully review each bank statement and reconcile it to a check register. Maintain a file with copies of all financial statements, bills, invoices, and receipts. You may even consider using an accounting software program to assist with maintaining accurate accounting records.
5. SET UP AN ALLOWANCE FOR THE PRINCIPAL
| You may find that the principle is reluctant to accept that they are at a stage in life where they need extra help. They may continue to make spending mistakes, even with your involvement. Giving them a credit card with an appropriate limit or a re-loadable debit card is one way to allow them some independence while still protecting their assets. |  |
Becoming an agent for a friend or loved one should not be taken lightly. If managed well, you will help them live with the security of knowing their assets are protected and under watchful stewardship. This additional support might even become essential in the care and wellbeing of your loved one.
Always remember, professionals, such as attorneys, accountants, and financial advisors are all available and able to assist you.
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By Jeanne St. Onge
FINANCIAL POWER OF ATTORNEY
A Financial Power of Attorney (POA) is defined as ‘a legal document giving one person (the agent or attorney-in-fact) the power to act on behalf of another person (the principal)’.
WHAT DOES THAT MEAN?
Essentially, this means legally granting someone the authority to make financial decisions for you, as if they were you.
Having a Financial POA means you (the principal) have given permission/power to someone (the agent) to make decisions for you. These decisions can include signing checks, making deposits, paying bills, selling property, buying insurance, filing taxes, and any other business you would normally be able to do.
A Financial Power of Attorney (POA) is defined as ‘a legal document giving one person (the agent or attorney-in-fact) the power to act on behalf of another person (the principal)’.
WHAT DOES THAT MEAN?
Essentially, this means legally granting someone the authority to make financial decisions for you, as if they were you.
Having a Financial POA means you (the principal) have given permission/power to someone (the agent) to make decisions for you. These decisions can include signing checks, making deposits, paying bills, selling property, buying insurance, filing taxes, and any other business you would normally be able to do.
ARE ALL POWERS OF ATTORNEY THE SAME?
No, there are several different types of POAs that can be used for several different reasons, purposes, or lengths of time.
MOST COMMON FINANCIAL POWERS OF ATTORNEY (POA)
Remember: Agent = your chosen ‘attorney-in-fact’
1. Durable Financial Power of Attorney
2. Springing Financial Power of Attorney
3. General Financial Power of Attorney
4. Special or Limited Financial Power of Attorney
No, there are several different types of POAs that can be used for several different reasons, purposes, or lengths of time.
MOST COMMON FINANCIAL POWERS OF ATTORNEY (POA)
Remember: Agent = your chosen ‘attorney-in-fact’
1. Durable Financial Power of Attorney
- Your agent will have either a general or limited power of attorney. This is effective immediately, and will remain in effect after you become incapacitated
- May be revoked while you have capacity
- Ceases upon your passing
2. Springing Financial Power of Attorney
- Your agent will act on your behalf only if you become incapacitated
- Effective upon your becoming incapacitated
- May be revoked while you have capacity
- Ceases upon your passing
3. General Financial Power of Attorney
- Your agent has broad power to make almost every decision on your behalf, or as specified in the document
- May be revoked while you have capacity
- Ceases upon your incapacitation or on your passing
4. Special or Limited Financial Power of Attorney
- Your agent is given parameters of his/her power over specific matters or events
- May be restricted to a specific period of time
- May be revoked will you have capacity
- Ceases upon your passing
WHEN WOULD I NEED A FINANCIAL POWER OF ATTORNEY (POA)?
If you become ill or incapacitated without a valid Financial POA, there is no one to handle your financial affairs. This means your spouse and/or family member would have to go to Probate Court to apply for conservatorship over you. The court would deliberate and appoint someone on your behalf, also known as a conservator. If you do not have a valid Financial POA, the court may appoint a family member or could appoint a stranger to handle your finances.
Setting up a Financial POA ahead of time ensures that you have chosen someone you trust to help you with your money. For this reason, it is best to have a Financial POA in place before an accident or illness occurs.
CHOOSING YOUR FINANCIAL POWER OF ATTORNEY (POA) AGENT
Your agent should put your interests before their own when making decisions, which is why it is especially important to choose someone you trust. It is wise to choose someone who is reliable, dependable, and capable of handling your affairs on your behalf, without abusing the powers granted to him or her.
I NEED A FINANCIAL POWER OF ATTORNEY (POA), NOW WHAT?
Please feel free to call us at Bassett Murray Law Group (734) 930-9200 and set up an appointment to meet with one of our Attorneys, Jane Bassett or Amanda Murray.
I ALREADY HAVE A FINANCIAL POWER OF ATTORNEY (POA)
If you already have a Financial POA, make sure to review and update it periodically (at least once every 3-5 years). It is important to keep this document updated, especially if you have recently had any big life changes (married/divorced, recent medical diagnosis, etc.).
If you become ill or incapacitated without a valid Financial POA, there is no one to handle your financial affairs. This means your spouse and/or family member would have to go to Probate Court to apply for conservatorship over you. The court would deliberate and appoint someone on your behalf, also known as a conservator. If you do not have a valid Financial POA, the court may appoint a family member or could appoint a stranger to handle your finances.
Setting up a Financial POA ahead of time ensures that you have chosen someone you trust to help you with your money. For this reason, it is best to have a Financial POA in place before an accident or illness occurs.
CHOOSING YOUR FINANCIAL POWER OF ATTORNEY (POA) AGENT
Your agent should put your interests before their own when making decisions, which is why it is especially important to choose someone you trust. It is wise to choose someone who is reliable, dependable, and capable of handling your affairs on your behalf, without abusing the powers granted to him or her.
I NEED A FINANCIAL POWER OF ATTORNEY (POA), NOW WHAT?
Please feel free to call us at Bassett Murray Law Group (734) 930-9200 and set up an appointment to meet with one of our Attorneys, Jane Bassett or Amanda Murray.
I ALREADY HAVE A FINANCIAL POWER OF ATTORNEY (POA)
If you already have a Financial POA, make sure to review and update it periodically (at least once every 3-5 years). It is important to keep this document updated, especially if you have recently had any big life changes (married/divorced, recent medical diagnosis, etc.).
Download a copy of Understanding Financial Power of Attorney (as seen above)
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